Rashtriya swasthya bima yojna- RSBY

BIRLA INSTITUTE OF MANAGEMENT TECHNOLOGY
Post Graduate Programme – AY 2017-019 - Term II
A report on
Rashtriya Swasthya Bima Yojana
(RSBY)
Mentor: Prof.Abhijeet chattoraj
Submitted by: Megha Ahuja
17IN631, PGDM-IBM

Acknowledgements
I am using this opportunity to express my gratitude to Prof. Abhijeet
chattoraj, who supported me throughout, providing insights on health
Insurance. I am thankful for his aspiring guidance and friendly advice during
the project work. I am sincerely grateful to him for sharing their truthful and
illuminating views on a number of issues related to the project.
Finally, I would like to thank BIMTECH for giving us this opportunity.
There would have been very few opportunities for us to work in such close
contact with an expert from industry of Insurance.

Table of Contents
Acknowledgement......................................................................................................2
Healthcare in India......................................................................................................5
Rashtriya Swasthya Bima Yojana .................................................................................7
Genesis of the RSBY.............................................................................................7
Implementation of RSBY.............................................................................................9
Objective of RSBY.......................................................................................................9
Current status of RSBY.............................................................................................. 10
Details of RSBY.........................................................................................................11
Features of the scheme............................................................................................. 12
Empowering the beneficiaries .......................................................................... 12
Information technologyintensive....................................................................... 12
Portability.........................................................................................................12
Safe and foolproof ............................................................................................ 12
Robust Monitering andevaluation .....................................................................12
Business model for all stakeholders ...................................................................13
Pemium trends in RSBY............................................................................................. 14
Primary Data analyses............................................................................................... 16
Impact of RSBY.........................................................................................................17
Coverage of RSBY,State-wise..................................................................................... 18
RSBY Smart card platform ......................................................................................... 19
Why RSBY has failed in India ..................................................................................... 20
Future Of RSBY.........................................................................................................21
Sources& References…………………………………………………………………………………………………22

Introduction
Healthcare in India
India's constitution guarantees free healthcare for all its citizens and all government
hospitals are required to provide free of cost healthcare facilities to the patients.
Each district headquarters in most states have one or more Government hospitals
where everything from diagnosis to medicine is given for free. According to one
report building on these Government and public healthcare units across the nation
is crucial to India's future while private insurance is probably not conducive to
India's conditions. The private healthcare sector is responsible for the majority of
healthcare in India. Most healthcare expenses are paid out of pocket by patients and
their families, rather than through insurance. Most healthcare expenses are paid out
of pocket by patients and their families, rather than through insurance.
Penetration of health insurance in India is low by international standards. Private
health insurance schemes, which constitute the bulk of insurance schemes availed
by the population, do not cover costs of consultation or medication. Only
hospitalization and associated expenses are covered. However, Indian
pharmaceutical companies routinely re-engineer processes for manufacturing
generic drugs to make medication available at much lower costs. In India, the
development assistance for health for a population of 1.3 billion is a total of $650
million out of which the majority is provided for child and newborn care ($230
million) and maternal health ($110 million).
HEALTHCARE SYSTEM
HEALTHCARE
SYSTEM
PUBLIC
HEALTHCARE
PRIVATE
HEALTHCARE

PUBLIC HEALTHCARE
Public healthcare is free for those below the poverty line. Most of the public
healthcare caters to the rural areas; and the poor quality arises from the reluctance
of experienced healthcare providers to visit the rural areas. Consequently, the
majority of the public healthcare system catering to the rural and remote areas relies
on inexperienced and unmotivated interns who are mandated to spend time in
public healthcare clinics as part of their curricular requirement. Other major reasons
are distance of the public sector facility, long wait times, and inconvenient hours of
operation.
Private healthcare
According to National Family Health Survey-3, the private medical sector remains
the primary source of health care for 70% of households in urban areas and 63% of
households in rural areas. Across 12 states in over 14,000 households indicated a
steady increase in the usage of private healthcare facilities over the last 25 years for
both Out Patient and In Patient services, across rural and urban areas. The high out
of pocket cost from the private healthcare sector has led many households to incur
Catastrophic Health Expenditure (CHE), which can be defined as health
expenditure that threatens a household's capacity to maintain a basic standard of
living. One study found that over 35% of poor Indian households incur CHE and
this reflects the detrimental state in which Indian health care system is at the
moment. With government expenditure on health as a percentage of GDP falling
over the years and the rise of private health care sector, the poor are left with fewer
options than before to access health care services.

India: Health expenditure
Health expenditure as percent of GDP – 2008

Rashtriya Swasthya Bima Yojana
Genesis of the RSBY
-The Rashtriya Swasthya Bima Yojana (RSBY) is a health insurance
scheme that aims at providing health insurance coverage to the poor
families of India.-
Social Security and healthcare assurance for all has been the motto of
Government of India, and it has taken various steps in this regard. One of the
most important policy milestones is the Unorganized Workers Social Security Act
(2008) enacted by the Central Government to provide for the social security and
welfare of the unorganized workers. This act recommends that the Central
Government provide social security schemes to mitigate risks due to disability,
health shocks, maternity and old age which all unorganized workers get exposed
to and are likely to suffer from. In India more than two thirs of expenditure on
health is through Out of Pocket (OOP) which is the most inefficient and least
accountable way of spending on health. Supply side financing on health alone has
not been found to be successful in reducing OOP expenditure on health

substantially and therefore, to test the demand side financing approach,
Government of India, decided to introduce Rashtriya Swasthya Bima Yojana
(RSBY) a Health Insurance Scheme for the Below Poverty Line families with the
objectives to reduce OOP expenditure on health and increase access to health
care. It provides cashless insurance coverage for hospitalization in both private
and public hospitals. The cost of the insurance premium is borne by both the
central (75 percent) and state (25 percent) governments. Initially, the scheme was
launched by the Ministry of Labour and Employment, but was transferred to the
Ministry of Health and Family Welfare on 1 April, 2015.
The RSBY was rolled out in 25 states of the country on 1 April, 2008. By
February 2014, a total of 36 million families have been covered under the scheme.
The initial intention of the Rashtriya Swasthya Bima Yojna (RSBY) was to
provide healthcare and financial relief only for those the Below Poverty Line
(BPL). It later evolved, however, to cover other workers and their families not
initially envisaged within the purview of the scheme -
These include -
1. MNREGA workers who have been employed for over 15 days in the
previous financial year
2. Domestic helpers and workers
3. Sanitation workers
4. Miners and mine workers
5. Rickshaw pullers and auto and taxi drivers
6. Street vendors
7. Building and other construction workers registered with the Welfare
Boards
8. Licensed Railway Porters
9. Beedi Workers.

Implementation of the RSBY
According to the scheme schedule, the state government of each state is responsible
for setting up a State Nodal Agency (SNA), which shall, in turn, be responsible for
implementing of the scheme. At a state level, the agency shall survey and make a
list of the eligible families. These families shall then approach Mobile Enrollment
Stations to submit photographs and biometric information (fingerprints) and collect
the smart card at the same time.
The smart card not only proves the identity of the beneficiary, but also helps them
avail cashless facilities at the hospitals. Complete scheme information and list of
hospitals is provided by the SNA along with the smart cards. The Central Complaint
and Grievance Redressal System (CGRS) handles the complaints received under
the scheme and helps in resolving them.
In the 2012-13 Union Budget INR 1096.7 crore was allocated by the government
towards RSBY. This was only a fraction of the amount required to cover the entire
country’s BPL population and the scheme attracted much criticism.
Objective of RSBY:-
RSBY has two fold objectives:
1.To provide financial protection against catastrophic health costs by reducing
out
2.To improve access to quality health care for below poverty line households of
pocket expenditure for hospitalization and other vulnerable groups in the
unorganized sector.

Current Status of RSBY Implementation in India
o Cards issued – App. 35.3 million
o People enrolled – Appr. 1222 million
o Number of People benefitted till now – Appr. 5.5 million
o Number of Hospitals Empanelled – Appr. 11,000
o States and UT where Service delivery has started – Twenty Eight
o Number of Insurance Companies Involved – Fifteen

DETAILS OF RSBY
According to the RSBY as launched in 2008 –
 Every BPL family holding a valid ration card may enrol to avail the
insurance benefits as extended by the scheme;
 INR 30 will be charged as a one-time registration fee, for a year while
Central and State Government pays the premium as per their sharing ratio
to the insurer selected by the State Government on the basis of a competitive
bidding;
 Upto 5 members of the family including one head of household, spouse and
three dependent persons (children or parents) may be covered under the
insurance scheme;
 Each family is entitled to claim (cashless) inpatient medical care up to INR
30,000 per annum, on family floater basis, for most of the diseases that
require hospitalization;
 The hospitalization may be done in any of the empanelled hospitals;
 Preexisting ailments will be covered from Day 1 of the enrolment, and there
is no age limit;
 Each family may also claim transport expenses of INR 100 per
hospitalisation subject to a maximum of INR 1000 per family per annum.
 At every state, the State Government sets up a State Nodal Agency (SNA)
that is responsible for implementing, monitoring supervision and part-
financing of the scheme by coordinating with Insurance Company,
Hospital, District Authorities and other local stake holders.

FEATURES OF SCEHEME
The RSBY scheme, differs from other schemes in several important ways.
 Empowering the beneficiary- RSBY provides the freedom of choice
between public and private hospitals and makes him a potential client worth
attracting on account of the significant revenues that hospitals stand to earn
through the scheme.
 Information Technology (IT) Intensive – Under RSBY scheme, every
beneficiary family is issued a biometric enabled smart card containing their
fingerprints and photographs. All the hospitals empanelled under RSBY are
IT enabled and connected to the server at the district level. This will ensure
a smooth data flow regarding service utilization periodically.
 Portability – The key feature of RSBY is that a beneficiary who has been
enrolled in a particular district will be able to use his/ her smart card in any
RSBY empanelled hospital across India. This makes the scheme truly
unique and beneficial to the poor families that migrate from one place to the
other.
 Safe and foolproof - The use of biometric enabled smart card and a key
management system makes this scheme safe and foolproof. The biometric
enabled smart card ensures that only the real beneficiary can use the smart
card.
 Robust Monitoring and Evaluation – RSBY is evolving a robust
monitoring and evaluation system. An elaborate backend data management
system is being put in place which can track any transaction across India
and provide periodic analytical reports.

 Business Model for all Stakeholders – The scheme has been designed as
a business model for a social sector scheme with incentives built for each
stakeholder. This business model design is conducive both in terms of
expansion of the scheme as well as for its long run sustainability.
 Intermediaries – The inclusion of intermediaries such as NGOs and
MFIs which have a greater stake in assisting BPL households. The
intermediaries will be paid for the services they render in reaching out
to the beneficiaries.
 Insurers – The insurer is paid premium for each household enrolled for
RSBY. Therefore, the insurer has the motivation to enroll as many
households as possible from the BPL list. This will result in better
coverage of targeted beneficiaries.
 Hospitals – A hospital has the incentive to provide treatment to large
number of beneficiaries as it is paid per beneficiary treated. Even public
hospitals have the incentive to treat beneficiaries under RSBY as the
money from the insurer will flow directly to the concerned public
hospital which they can use for their own purposes. Insurers, in contrast,
will monitor participating hospitals in order to prevent unnecessary
procedures or fraud resulting in excessive claims.
 Government – By paying only a maximum sum up to Rs. 750/- per
family per year, the Government is able to provide access to quality
health care to the below poverty line population. It will also lead to a
healthy competition between public and private providers which in turn
will improve the functioning of the public health care providers.

Premium Trends in RSBY
The premium cost for enrolled beneficiaries under the scheme is shared by
Government of India and the State Governments. The program has the target to
cover 70 million households by the end of the Twelfth Five Year Plan (2012-17).
Its main service delivery model remained as demand financing, freedom of choice
among accredited government and private hospitals, and cashless service
reimbursable to provider on a pre-determined package rates on family floater basis,
could become a strong pillar for the universal health care system laid down by
Government of India.
Since 1st April, 2015, the Scheme Rashtriya Swasthya Bima Yojana (RSBY) has
been transferred to Ministry of Health & Family Welfare on “as is where is” basis.
Ministry of Health & Family Welfare is administering and implementing the
scheme through a decentralized implementation structure at the State level.

IMPACT OF RSBY
 Improvement in access to Healthcare.
 Hospitals being set up in remote areas by the private sector
 Public Sector hospitals competing and improving performance to gain
access to flexible funds & incentives
 Share of claims of public hospitals increasing over time
 Penetration in the areas affected by extremist activities.
 Marked improvement in utilization by women in scheme.
 For expenditures beyond Rs. 30,000, State Governments designing own
schemes
 Himachal Pradesh, Meghalaya, Gujarat and Kerala are already providing
 Few other States are in the process of taking decision
 Utilization data from States is able to provide disease profiling across
different districts
 As per different evaluations Out of pocket expenditure on health of RSBY
beneficiaries has come down dramatically
 As per different evaluations instances of health related debts have come
down;
 Migrant workers are getting benefits across districts and States of RSBY.

Coverage of Rashtriya Swasthya
Bima Yojana, By State

RSBY Smart Card Platform
As per the data, RSBY Smart Card Platform is emerging a robust platform to deliver
other social security schemes also
Aadmi Bima Yojana benefits to the beneficiaries
has taken a decision to use this smart card for National Social Assistance
Programme
.

Why Rashtriya Swasthya Bima Yojana has failed
India.
1. Almost 40% BPL beneficiaries still not covered - Of the 59 million
households eligible, over 36.3 million (61%) were covered by RSBY. However,
it needs to cover a large proportion of the poor for its impact to be noticeable.
In two states with poor health and education indicators, Assam and Bihar, only
50% to 60% of BPL households are covered, according to government data.
2. Hospitalisation costs rise, coverage remains the same – According to
the national sample survey In 2014, the average cost of hospitalisation for
households was Rs 14,935 in rural India and Rs 24,435 in urban. The cost of
hospitalisation increased 10.1% in rural areas and 10.7% in urban India in the
decade ending 2014, but the RSBY insurance amount has remained the same
over the nine years of the scheme’s existence. The costs for common surgeries
are: Rs 2,469-Rs 41,087 for lower abdomen Caesarian, Rs 4,124-Rs 57,622
for hysterectomy and Rs 2,421-Rs 3616 for appendectomy, according to a
study published in 2103 in the British Medical Journal.
The relatively low coverage limit of the scheme may have led some households
to utilize hospital services beyond the RSBY cap. The survey data showed that
in 2012, among households incurring inpatient out-of-pocket expenditure,
approximately 9% reported paying more than Rs 30,000. The average annual
expenditure ranged from Rs 75,000 to Rs 80,000.so, an insurance cover of Rs
30,000 is inadequate for a family of five
3. Only 35% eligible households know of RSBY- One of the main reasons
for low enrolment is that not enough people eligible for it know about it. Of all
the eligible households, 35% were not aware of the scheme, one of the main
reasons for low enrolment is that not enough people eligible for it know about
it.

4. The poor prefer outpatient services which RSBY doesn’t cover - The
RSBY does not pay for the cost of outpatient care, which does not involve
hospitalisation. Typically, this would include doctor’s consultation fees,
medicines and medical appliance costs. However, 63.5% of all out-of-pocket
expenditure on health relates to outpatient costs. This means a scheme that
aims to reduce the burden of out-of-pocket expenditure on BPL families is
missing a critical factor. The poor generally prefer outpatient treatment because
it does not involve hospitalisation which leads to loss of wages.
5. Shoddy treatment of BPL patients- Even though the RSBY pays for
medicines during hospitalisation, many hospitals refuse to provide these and
sometimes push for unnecessary services that adds to the cost of
hospitalisation. Hospitals also tend to be unfriendly to poor patients and this
discourages them from seeking medical help. Many hospitals refuse to admit
RSBY-enrolled patients due to administrative concerns such as delayed
reimbursement by RSBY to hospitals. RSBY beneficiaries are given smart
cards, verifiable through fingerprints, to facilitate cashless benefit transfer. But
these cards are rarely used for two reasons. One, patients are turned down or
their use discouraged by empanelled hospitals. Two, most beneficiaries do not
know how to use the services offered by hospitals. The distance of the
empanelled hospital from the patient’s home is also a factor that discourages
beneficiaries.
Future: How to make the scheme more effective
Prime Minister Narendra Modi said that his government plans to increase the
RSBY benefit from INR 30,000 per family per annum to INR 1 lakh per family
per annum. This means a number of critical ailments could be covered by the
benefits.
Increasing enrolment and educating those would be helpful to make the
RSBY more effective.
Strengthening of primary care in order to bring down out-of-pocket
expenditure. Neighboring nations i.e Sri Lanka and Thailand have both
strengthened their primary health care system to provide better coverage.
These points might be helpful to make RSBY more effective.

Sources & References
1. http://www.rsby.gov.in/about_rsby.aspx
2. https://en.wikipedia.org/wiki/Rashtriya_Swasthya_Bima_Yojana
3. http://www.business-standard.com/article/economy-policy/why-rashtriya-
swasthya-bima-yojana-has-failed-india-s-poor-117101700115_1.html
4. https://www.mapsofindia.com/my-india/government/rashtriya-swasthya-
bima-yojana-rsby
5. https://www.cgdev.org/sites/default/files/archive/doc/full_text/CGDEssays
/3120468/early-success-indias-health-insurance-rsby.html
6. https://www.google.co.in/search?q=Coverage+of+Rashtriya+Swasthya+B
ima+Yojana,+By+State&dcr=0&source=lnms&tbm=isch&sa=X&ved=0a
hUKEwiAz6_otsHXAhUKrI8KHejzB7sQ_AUICygC&biw=1366&bih=6
37

Rashtriya swasthya bima yojna- RSBY

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to Rashtriya swasthya bima yojna- RSBY

Similar to Rashtriya swasthya bima yojna- RSBY (20)

Recently uploaded

Recently uploaded (20)

Rashtriya swasthya bima yojna- RSBY